Emergent Research

EMERGENT RESEARCH is focused on better understanding the small business sector of the US and global economy.

Authors

The authors are Steve King and Carolyn Ockels. Steve and Carolyn are partners at Emergent Research and Senior Fellows at the Society for New Communications Research. Carolyn is leading the coworking study and Steve is a member of the project team.

Videos

Disclosure Policy

Emergent Research works with corporate, government and non-profit clients. When we reference organizations that have provided us funding in the last year we will note it.
If we mention a product or service that we received for free or other considerations, we will note it.

Assistant Edge

February 05, 2013

Is Traditional Retail Dead?

A recent Pando Media article quotes noted VC Marc Andreessen saying traditional brick and mortar retail will be dead within the next the decade.

And by dead, he means really dead - as in we will do all our shopping online. Key quotes from the article:

“Retail guys are going to go out of business and ecommerce will become the place everyone buys. You are not going to have a choice … Retail chains are a fundamentally implausible economic structure if there’s a viable alternative. … Malls are going under, and there’s more to come. These chains are much closer to going under than you think.

This is obviously hyperbole from a guy and media outlet that both like hyperbole.

There's no doubt online commerce is fundamentally changing where and how we buy. And these changes are putting tremendous pressure on brick and mortar retailers. But traditional retail is not going to disappear anytime soon.

According to Forrester, retail is about a $3.1 trillion industry in the U.S., with ecommerce comprising about 7% of the total. They are forecasting by 2016 ecommerce's share of retail will be about 8.6% of the total. That's a long way from 100%.

"It’s clear that the main battlefront of the digital shopping wars is going to be stores, not pure-play e-commerce. It’s in the stores, where digital has barely begun to take hold, that we will see the most massive innovations in the next few years."

So we may see the end of traditional retail. But it's replacement will likely not be online commerce by itself. It will likely be blended shopping environments mixing both online and real world shopping.

This makes much more sense to me when you factor in the growing role experiences are playing in shopping. Even in a digital world, people - and especially younger people - value real world experiences. As long as this piece of human nature is true, real world retail will continue to exist.